April 30th, 2024 | 07:00 CEST
Evotec, Vidac Pharma, BioNTech - The billion-dollar race for cancer therapy
Oncology is on the brink of a golden era. Driven by an increase in cancer cases and impressive scientific advances, including gene and immunotherapies, a billion-dollar market with immense growth prospects is emerging. The increasing demand for personalized medicines and the rapid development of new forms of therapy through technological progress are driving revenues in the pharmaceutical industry. This not only underlines the enormous financial value of oncology as an investment area but also promises ground-breaking improvements in patient care. We look at three companies that could benefit from this.
time to read: 4 minutes
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Author:
Armin Schulz
ISIN:
EVOTEC SE INH O.N. | DE0005664809 , VIDAC PHARMA HOLDING PLC | GB00BM9XQ619 , BIONTECH SE SPON. ADRS 1 | US09075V1026
Table of contents:
Author
Armin Schulz
Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.
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Evotec - Aiming to refocus business
Hamburg-based biotech company Evotec has revealed its full-year financial results for 2023, which are fully in line with revised guidance. With a focus on profitable growth, the Company plans to generate an annual EBITDA contribution of over EUR 40 million through scaling and site adjustments. As of Q1 2024, Evotec will reorganize its business segments into "Shared R&D" and "Just-Evotec Biologics", which promises a more efficient reporting structure. Despite various challenges, such as a severe cyberattack, which caused the base business to shrink by 4%, Evotec recorded a 4% increase in revenues to EUR 781.4 million.
Of particular note here is the biologics segment "Just-Evotec Biologics", whose revenues more than doubled compared to the previous year. The other key financial figures, such as a slightly lower gross margin and a declining adjusted Group EBITDA, illustrate the need for realignment. For 2024, Evotec is on a course that will set the Company up for sustainable and profitable growth through strategic focus and restructuring. The ambitious plans for the future include double-digit revenue growth and a significant increase in adjusted Group EBITDA.
As of July 1, Dr. Christian Wojczewski will become Evotec's new Chief Executive Officer (CEO), while interim CEO Dr. Mario Polywka will retire. The further development of partnerships, including oncology, and continuous innovation are considered the key to success. This also includes the strategic partnership with Dewpoint Therapeutics in the field of oncology, in which Dewpoint's leading programs for the development of cancer therapeutics are being driven forward. The news of the realignment caused the share price to fall once again. The share is currently trading at EUR 9.63.
Vidac Pharma - VDA-1275 development making progress
Vidac Pharma, with sites in the UK and Israel, specializes in oncology and oncodermatology research. Under the leadership of Prof. Max Herzberg, a key figure in the Israeli biotech landscape, the Company is developing promising therapies against cancer. Vidac's innovative technology aims to correct a universal feature of cancer cells, which could herald a new era in cancer treatment. With its considerable portfolio of intellectual property and the leading product VDA-1102, currently in clinical trials, Vidac is addressing early-stage skin cancer and cutaneous T-cell lymphoma.
On March 12, the Company announced that it had received approval from Israel to proceed with the 2nd phase of a Phase 2a clinical study for VDA-1102 in mycosis fungoides, a form of cutaneous T-cell lymphoma (CTCL). The cancer drug candidate VDA-1275 also received approval from the Japanese Patent Office following promising preclinical study results. On April 29, it was announced that VDA-1275 has been advanced to the next phase of preclinical investigational drug studies. The compound had shown strong synergistic effects in combination with standard solid tumor therapy in various laboratory trials.
The Company is making significant progress in the development of its drugs and has 7 patent families. This should not have escaped the attention of the big players in the pharmaceutical industry. Novartis recently acquired MorphoSys because of its cancer drugs. After the share price fell from EUR 1.50 at the beginning of the year to the current EUR 0.208, the Company now only has a market capitalization of around EUR 11 million. This seems very favorable when you compare the research results and the patents. The share is currently likely to be bottoming out and is no longer as volatile as it was at the beginning of the year. A major correction could, therefore, be on the cards.
BioNTech - Business development with ups and downs
After a challenging financial year, the Mainz-based biotechnology company BioNTech has presented its annual figures. Following remarkable growth in previous years, the Company experienced a significant decline in revenue to EUR 3.82 billion last year from EUR 17.31 billion. Earnings per share also fell significantly. The results fell short of expected market forecasts, but management emphasized the progressive strengthening of the financial position and the consistent further development in the field of immunotherapies.
Attention is increasingly focused on BioNTech's oncology pipeline. With the promise to launch the first cancer drug on the market by 2026 and to obtain approvals for ten indications by 2030, the Company is sending a clear signal. The focus is particularly on mRNA-based technology, with preliminary study results, such as those for the vaccine candidate BNT122, showing promising immune responses in patients. This progress could put the Company in a leading position in the fight against cancer despite a slowly phasing out Corona vaccine business.
The oncology sector offers considerable potential for investors, especially in light of the sustained demand in this sector. Although the stock market has mixed reactions to the latest news, the long-term outlook seems promising. Expert opinion is divided, but many emphasize the potential of the oncology pipeline and the importance of further research results. For interested equity investors, a long-term commitment could pay off if the promises of oncology research are realized. One share currently costs EUR 82.90.
Oncology will be one of the biggest growth drivers in the biotech and pharmaceutical sectors in the coming years. Anyone who can offer an effective therapy here has a blockbuster in their product portfolio. Evotec relies primarily on partnerships in this area, such as the one with Dewpoint Therapeutics. Vidac Pharma has a therapeutic approach that deprives cancer cells of their vital "fuel" and thus stops cancer growth. The flagship product VDA-1102 is already in clinical Phase 2 trials. A second compound has also shown promising results in preclinical studies. The development pipeline at BioNTech is full. Thanks to the high income from vaccine sales, research can run at full speed.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
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